Vertical Spread Example: 

 

Sell SRSGK            July 2009    55 Call             $22.00

Buy SRSGI            July 2009    45 Call             $25.50

 

Net Cost                      $3.50(+Trading Costs)

 

Maximum Loss            $3.50(+Trading Costs)

 

Maximum Gain            $6.50(-Trading Costs)  (=$10.00-$3.50)

 

SRS is trading for        $59.44 at the close on Friday 01/16/09

 

Or

 

 

Sell SRSGK            July 2009    55 Call             $22.00

Buy SAKGG            July 2009    35 Call             $29.80

 

Net Cost                      $7.80(+Trading Costs)

 

Maximum Loss            $7.80(+Trading Costs)

 

Maximum Gain            $12.20(-Trading Costs)  (=$20.00-$7.80)

 

SRS is trading for        $59.44 at the close on Friday 01/16/09

 

SRS is the Proshares Ultra Short Real Estate ETF.  This fund moves double opposite the Real Estate ETF.  If the Real Estate ETF move Down 10% The Ultra Short Real Estate ETF will move (approximately) UP 20%.

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